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With Profits Maturity Payouts, Asset Shares and Smoothing

Published online by Cambridge University Press:  03 October 2014

A. M. Eastwood ,
M. C. Ledlie ,
A. S. Macdonald  and
D. M. Pike
A. M. Eastwood
Affiliation:
Bonus and Valuation Research Group of the Faculty of Actuaries
M. C. Ledlie
Affiliation:
Bonus and Valuation Research Group of the Faculty of Actuaries
A. S. Macdonald
Affiliation:
Bonus and Valuation Research Group of the Faculty of Actuaries
D. M. Pike
Affiliation:
Bonus and Valuation Research Group of the Faculty of Actuaries
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Abstract

1.1.1 The Bonus and Valuation Research Group of the Faculty of Actuaries began the work which eventually led to this paper towards the end of 1991. About this time there was considerable speculation that levels of maturity payouts on with profits policies might be significantly in excess of the level that could be justified by the actual investment earnings underlying the policies. The initial aims of the research group were to:

(a) examine this claim;

(b) consider to what extent overpayment, if any, could be explained by the smoothing methods that might have been used by offices; and

(c) examine the practical consequences of continuing to adopt those smoothing methods.

Type
Research Article
Information
Transactions of the Faculty of Actuaries , Volume 44 , 1992 , pp. 497 - 575
Copyright
Copyright © Institute and Faculty of Actuaries 1992

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